Being Cheap vs. Being Frugal (aka Smart)

(Today’s guest post comes from my new friend, Ashley, over at The Frugal Model. A real life model promoting real life finance! How sexy is that? (Answer: Very))

I’ve always gotten offended when people use the word “cheap” to describe my spending and savings habits. When I hear cheap, I think women with blue eyeshadow in bedazzled skirts that are three sizes too small. I picture products that fall apart after one use. I always cringe, and then politely correct them – “I am not cheap! I’m frugal. There’s a big difference.”

I suppose that it’s a common misunderstanding of words, but I personally feel that it’s important to straighten this whole misconception out. Why? Because since no one ever wants to feel as though they are being judged as “cheap”, they spend money they don’t have on things they don’t need all because they simply weren’t being referred to as “smart” instead.

So let me break down the difference. When it comes to describing spending habits, cheap is appropriately used in instances where people hold out on doing things for others because they don’t want to spend money. In this case, cheap can be interchangeably used with the word selfish. For example, a man can refuse to pay for his date’s meal because he claims to believe in sharing all costs, but if she can’t really afford it (and he absolutely can) – the dude is being cheap.

Another example – we all have that friend who always “forgets” your birthday gift at home when they get to your party, but it never materializes. You know damn well they didn’t get you a gift – because they’re that cheap friend of yours.

On the other hand, being smart with your money (also known as being frugal), is when you are getting yourself out of debt or creating a savings by being mindful of how you spend your money. It’s politely declining offers to go places that you can’t afford instead of pulling a “lost wallet” trick. It’s letting your friends know your situation so they understand where you’re coming from when you want to split off your portion of the bill and pay separately from everyone else who’s boozing it up. If you can’t afford to go on an expensive date – plan a thoughtful picnic in the park. This is respectable, and more importantly it’s smart behavior that will get you to the position where you no longer have to worry about saving every dollar.

I hope this clears up the confusion a little. More than worrying about what other people are thinking, it is especially important to be mindful of how you’ve defined money-saving habits in your own mind. Labeling certain behaviors as being cheap will make you less willing to do them – even though you’re fully aware that it’s in your best interest.

Remember, even millionaires – especially millionaires – still practice frugal behavior once they’ve reached where they want to be financially. Keeping modest homes and cars, not spending foolishly on big nights out, etc, all help get you to those end goals. And trust me, they’re definitely not worried about people labeling them as cheap.

When you have real money, you don’t really care what people think of you at all.

———-Ashley is a model living in NYC who loves sharing her money saving tips and advice on living luxe for less. Check out how she keeps frugality sexy over on her site The Frugal Model, and follow her @thefrugalmodel for daily inspiration.

PS: Check out this post over on the realities of being a model too – pretty crazy. I know I linked to it already last week, but it’s worth repeating :) Thanks for sharing, Ashley!

I think the difference is that someone frugal aims to not spend money on things they don’t value – so they have the funds to spend on what is truly important to them. Those who are cheap don’t want to spend money at all.

I know that’s the worst!! When you’re frugal you can be upfront about the fact that you’re saving money. It’s definitely nothing to be embarrassed about – having the will power to save money is a respectable thing (and you won’t have to keep pinching pennies which is a nice upside too).

In terms of definition, I think the difference is pretty small, but the way that each word’s connotations have developed are more significant.

To me, “frugal” implies that someone prioritizes and spends less on certain things to spend more on things they value (Whether that thing they value is retirement, a house, college for kids, or just paying off debt). On the other hand, “cheap” people only value the money they aren’t spending.

Spot on Ashley! I think many confuse the two when they really are completely opposite. I think being frugal means getting value for your money and making it work for you as opposed to a miser who’ll drive 10 extra miles to save $.02 per gallon on their gas.

I agree, there is definitely a difference between being cheap and being frugal. I can’t help but laugh at people when they refer to me as cheap just because I don’t waste my money on expensive meals or fancy things, but chose to save my money instead.

I think there is a line between cheap and frugal, but it’s a fine line. What one may think is selfish, another may think it’s actually being smart with your money. We all have to pick and choose our financial battles and ultimately it doesn’t matter if I saved $100 with grocery coupons or because I bought a cheap present for my aunt.

Great article! There definitely is a big different between cheap and frugal. I don’t like to spend my money unless it’s something worth it! I love buying gifts for other people and I spend tons of money on that. Mostly my nieces.

I don’t think that I am cheap but I am definitely frugal. I rarely pay full price for anything, including food, but I just think that is being smart with my money. Why should I pay full price for something that I can get for half price?

Being cheap means that you don’t want to spend money…every. Being frugal means that you are just always looking for the best deal.

Well said, Ashley. There are relatives in my own family who have the reputation of “having to always urgently go to the bathroom” after a meal is over and the bill arrives… which is another example of being cheap, selfish, and slimy. You don’t want to get that kind of a reputation among family and friends!

From the Simple Living Forums 15+ years ago–
Frugal–You find some new ugly-orange towels that fell off a truck and use them for 20+ years and then give them to the animal shelter when they get too worn for human use.

Cheap–You find some new ugly-orange towels that fell off a truck and you give them to your sister for a wedding gift. :)

My other projects

Disclaimer

I, J. Money, only claim the thoughts from my head. I am not a banker, CPA, money manager or anything else of that sort. Please seek a professional for any "real" advice. More info: privacy & disclosure page